Why Some Solar Shares Popped and Others Dropped

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What: Shares of solar stocks are in panic mode this afternoon after the Commerce Department announced anti-dumping tariffs of 31.22% to 250% on Chinese solar imports. As a result, SunPower's (Nasdaq: SPWR  ) shares are trading 12% higher as I am writing and Yingli Green Energy (NYSE: YGE  ) is down 12% and falling.

So what: In March, the U.S. Department of Commerce announced an initial tariff on solar-cell manufacturers of between 2.9% and 4.73%, and the market saw it as a win for Chinese companies. But those who follow the industry, including me, have been warning that the reaction may be overdone because anti-dumping tariffs have typically been higher in these cases. Today, the other shoe dropped.

The latest tariff will be retroactive 90 days and throws the future of Chinese imports into question.

Now what: Chinese manufacturers have already said they will be able to get around the rules by modifying their supply chains, but until that happens, this is a big win for U.S. companies. SunPower and First Solar (Nasdaq: FSLR  ) should be seen as the big winners in this case, with Chinese cell makers like JA Solar (Nasdaq: JASO  ) and Suntech (NYSE: STP  ) being the losers.

This has been one of the reasons I've been high on SunPower recently, and with its already dominant position in the U.S. market, I only see the company's position getting better. I would still buy SunPower after today's move because I think it will help the company grab more share in the United States.

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Fool contributor Travis Hoium owns shares of SunPower in both managed and personal accounts. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On May 17, 2012, at 4:25 PM, antonynewman wrote:

    Is this a final decision or is a final one scheduled for October? Why is it the government needs to step in to the solar industry in order to help out US solar companies because they can't figure a way to compete with better Chinese companies. it is called competition and happens across all industries. So why does the commerce dept have to single out solar? This is an unfair way to help US solar companies. What industry will they target next? And don't they realize that the Chinese can be spiteful and do the same to our exports? I hope they reverse this dumb ruling.

  • Report this Comment On May 17, 2012, at 5:00 PM, tjsimone wrote:

    Compete with better chinese solar companies? You mean chinese subsidized solar companies?

    Learn the industry , you havent even scratched the surface as to what is going on.....

  • Report this Comment On May 17, 2012, at 6:08 PM, jargonific wrote:

    Even so, FSLR was down from 16.00 a few days ago so it seems like a good buy at the 14 range I just bought it at. SPWR was a great co., and then Total oil stepped in and bought it... now who knows. But it was trading in the 20s when I owned it. Maybe will invest again if my offer is accepted.

    CSIQ will be moving operations to Japan from what I understand, maybe to avoid the tariff issue? Maybe they all will, but I think this will help US based solar industries a lot. If Obama is reelected, hopefully, more incentives for alternative energy to follow. We know that the Republicans won't be going there..

  • Report this Comment On June 21, 2013, at 3:18 PM, jargonific wrote:

    I do hope at least some reader bought FSLR at the 16 range because of me. That would be fun to think about.

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